Lola Castorina, US Environmental Policy Student
April 16, 2025
In 2023, the United States’ energy sector emitted 4.807 billion metric tons of carbon dioxide.[i] In 2024, earth’s average surface temperature reached a record high, with mean global temperatures up 2.65 degrees Fahrenheit from preindustrial levels.[ii] With temperatures increasing and the impacts of climate change worsening year by year, the need to transition to renewable energy is more dire than ever. In 2023, petroleum, natural gas, and coal accounted for 83% of total U.S. energy consumption, demonstrating the domination of fossil fuels in the national energy portfolio.[iii] However, renewable energy generation has increased forty-two percent from 2010 to 2020 due to increasing policy support at the federal and state level.[iv] As the climate crisis escalates, policy to bolster the development and expansion of renewable energy technology is essential to accelerate the clean energy transition.
The Alta Wind Energy Center (AWEC) exemplifies a successful renewable energy development project that has leveraged policy incentives since its construction in July 2010. Located in the Tehachapi Mountains in Kern County, California and owned by Terra-Gen Power, AWEC is the second largest onshore wind energy project in the world and the largest wind farm in the U.S.[v] The wind farm stretches over 3,200 acres and includes around 600 wind turbines.[vi] Under a power purchase agreement with Southern California Edison, AWEC will supply 1,550 megawatts of clean energy to California for over twenty-five years, the equivalent energy required to power 375,000 to 500,000 California homes.[vii] Generating this amount of energy from coal would require an estimated 2.3 million metric tons of coal per year.[viii] Commissioned in 2010, AWEC received $1.2 billion USD in financing from private partners including Credit Suisse, Citibank, and Barclays Capital.[ix] The project created an estimated 3,000 domestic jobs and generated up to $1 billion in the local economy. [x]
While a variety of factors contributed to the development and success of AWEC—including private investment and public support for clean energy—policy support and tax incentives played a critical role.[xi] More specifically, California’s Renewables Portfolio Standard and the Federal Production Tax Credit supported AWEC.[xii] Built on a combination of private and public lands, the Bureau of Land Management also played a crucial role in facilitating land access and minimizing environmental impact.[xiii]
In 2022, California established a Renewables Portfolio Standard (RPS) which required that by 2017, 20% of electricity retail sales must come from renewable sources.[xiv] In 2015, the RPS was revised and increased to mandate a 33% RPS by 2020 and 50% RPS by 2030.[xv] These ambitious renewable energy targets place pressure on electric utilities operating in California to invest in renewable projects, as seen in AWEC.[xvi] Thus, Terra-Gen Power, the constructors of AWEC, leveraged California’s RPS as a perk of AWEC’s development, while utilities and investors felt the pressure of increasing portfolio standards to invest in AWEC.[xvii] Therefore, California’s RPS exemplifies an effective state-level policy that supports renewable energy development.[xviii] Without pressure from the portfolio standard, it is less likely that AWEC would have received large investments from Citibank and others, or that Southern California Edison would have taken such interest in the project.
In addition to the California RPS, federal policies played a crucial role in the creation of AWEC. For instance, the Federal Production Tax Credit (PTC) offers renewable energy facilities credits on a per kilowatt-hour basis. In the early 2000s during the development of AWEC, this credit was 2.2 cents per kilowatt-hour (2011 dollars, amount not adjusted for inflation).[xix] Currently the PTC offers up to 2.75 cents per kilowatt-hour for electricity generated from wind, in addition to renewable sources such as geothermal and closed-loop biomass resources.[xx] With a capacity of 1,550 megawatts, the economic benefits of the PTC to AWEC surpass $1 billion over its lifetime. The success of AWEC therefore underscores the importance of federal policy support and tax credits to advance renewable energy development.
Since the commission of AWEC in 2010, additional tax credits and policies to support renewable development have been enacted, allowing for its continued operation. For example, the Inflation Reduction Act (IRA) passed in 2022 under President Joe Biden’s Administration offered notable tax credits for clean energy. Section 48 of the IRA provided a 30% tax credit on the capital costs of renewable energy systems, up until December 2024.[xxi] Though this credit could not be retroactively applied to AWEC, it applied to any upgrades, expansions, or maintenance costs before December 2024. Therefore, for any additional turbines or expansions AWEC added up until December 2024, Section 48 applied, illustrating how newer policies and tax credits contribute to the continued operation of older renewable developments.
For example, in 2024, the AWEC added a Battery Energy Storage System (BESS) project. In total, the BESS project required 25 acres of land to store 1,2000 megawatts of electricity and supply 150 megawatts.[xxii] This BESS project can largely be attributed to policies passed by California and the federal government. In 2019, California passed major additions to the 2001 California Self-Generation Incentive Program (SGIP).[xxiii] This program offers a rebate rate between $150 and $200 per kilowatt-hour of installed storage capacity.[xxiv] Moreover, the development of AWEC’s BESS project also benefited from the 30% tax credit of Section 48 of the Inflation Reduction Act.
The Alta Wind Energy Center provides a prime example of the importance of policy support and tax credits at both the federal and state level to advance renewable energy development. Not only did AWEC rely on tax credits and policies in its initial stages of founding and creation, but it has exhibited ongoing reliance and benefits from renewable energy policies by leveraging policies enacted after its creation, such as the 2022 Inflation Reduction Act. Therefore, it is critical that clean energy policy is consistently updated and improved. Moreover, policies and tax credits must support every stage of development, allowing older projects such as AWEC to benefit from newer policies and possibly leverage them to expand capacity. As conservationists, scientists, entrepreneurs, and policymakers work to combat climate change, one commonality remains clear: the importance of policy support.
[i] U.S. Energy Information Administration, “Carbon Dioxide Emissions,” accessed April 3, 2025, https://www.eia.gov/environment/emissions/carbon/.
[ii] NASA, “Global Temperature,” accessed April 3, 2025, https://climate.nasa.gov/vital-signs/global-temperature/?intent=121.
[iii] Ibid.
[iv] Center for Climate and Energy Solutions, “Renewable Energy,” accessed April 3, 2025, https://www.c2es.org/content/renewable-energy/.
[v] Power Technology, “Alta Wind Energy Center (AWEC), California,” accessed April 3, 2025, https://www.power-technology.com/projects/alta-wind-energy-center-awec-california/?cf-view.
[vi] Ibid.
[vii] Ibid.
[viii] Inside Climate News, “Alta Wind Farm: America’s Largest Wind Power Project Blows Closer,” accessed April 3, 2025, https://insideclimatenews.org/news/27072009/alta-wind-farm-americas-largest-wind-power-project-blows-closer/#:~:text=Eventually%20it%20will%20feed%203%2C000%20MW%20of%20clean%20power%20into%20California’s%20power%20grid.&text=%22The%20Alta%20Wind%20Energy%20Center%20is%20a,2010%20from%20renewable%20sources%2C%22%20the%20company%20said.
[ix] Ibid.
[x] Ibid.
[xi] California Energy Commission. “Renewables Portfolio Standard.” Last modified April 1, 2025. https://www.energy.ca.gov/programs-and-topics/programs/renewables-portfolio-standard.
[xii] Ibid; U.S. Environmental Protection Agency. “Renewable Electricity Production Tax Credit Information.” Last modified December 2024. https://www.epa.gov/lmop/renewable-electricity-production-tax-credit-information.
[xiii] U.S. Department of the Interior, Bureau of Land Management. Alta East Wind Project: Proposed Plan Amendment and Final Environmental Impact Statement, Volume 1: Chapters 1 through 3. CACA-0052537. Publication Index Number: BLM/CA/ES-2013-011+1793. February 2013. https://eplanning.blm.gov/public_projects/nepa/66300/80735/93985/Vol1_BLM_Alta_East_FEIS.pdf.
[xiv] California Public Utilities Commission, “Renewables Portfolio Standard (RPS),” accessed April 3, 2025, https://www.cpuc.ca.gov/rps/#:~:text=California’s%20RPS%20program%20was%20established,by%20renewable%20resources%20by%202017.
[xv] Ibid.
[xvi] Ibid.
[xvii] Feldman, Stacy. “Alta Wind Farm, America’s Largest Wind Power Project, Blows Closer.” Inside Climate News, July 27, 2009. https://insideclimatenews.org/news/27072009/alta-wind-farm-americas-largest-wind-power-project-blows-closer/.
[xviii] Ibid.
[xix] U.S. Environmental Protection Agency, “Renewable Electricity Production Tax Credit Information,” accessed April 3, 2025, https://www.epa.gov/lmop/renewable-electricity-production-tax-credit-information#:~:text=The%20renewable%20electricity%20production%20tax,loop%20biomass%20and%20geothermal%20resources.
[xx] Ibid.
[xxi] Eide Bailly, “Increase Cash Flow by Investing in Clean Energy,” accessed April 3, 2025, https://www.eidebailly.com/insights/articles/2023/3/increase-cash-flow-by-investing-in-clean-energy.
[xxii] U.S. Bureau of Land Management, “Project 2030259,” accessed April 3, 2025, https://eplanning.blm.gov/eplanning-ui/project/2030259/510.
[xxiii] Solar Insure, “California Battery Storage Incentives,” accessed April 3, 2025, https://www.solarinsure.com/california-battery-storage-incentives#:~:text=Incentive%20Program%20(SGIP)-,California’s%20Self%2DGeneration%20Incentive%20Program%20(SGIP),Key%20Objectives%20of%20SGIP.
[xxiv] SolarReviews, “California SGIP Battery Rebate: What You Need to Know,” accessed April 3, 2025, https://www.solarreviews.com/blog/california-sgip-battery-rebate.
Hi Lola,
Really enjoyed reading this post! As someone from California, I am surprised I have never heard of the Alta Wind Energy Center and its trailblazing green energy initiatives. I appreciate how you clearly explained what the AWEC is doing, its successes, and then led into how it came to be. California’s legislature is typically supportive when it comes to new energy initiatives. This one is specifically unique because of the level of support it got and the successful loopholes found. It is unclear if all the funding, rebates, and support for this initiative were intended, but the project still found a way to make it work successfully. The federal funding makes all the difference with large-scale energy developments such as this. Under this administration, it is unlikely similar developments will be federally backed. This situation is a great example of what both state and federal governments can achieve if they work together. However, private investments may be the future for green energy, and they shouldn’t be overlooked as a resource for state governments. Great job, Lola, very informative, thanks for this!
Thanks for the great post, Lola! The AWEC shows such great potential for renewable energy expansion and the bandwidth of energy security and reliability that wind power can provide. As Trump attacks wind energy through his deregulatory and anti-climate science executive orders, I’m extremely curious about the power of private investments to uphold important industry development in the renewable energy sector. I would love to learn more about Credit Suisse, Citibank, and Barclays’ climate mission statements, and how we can lead this powerhouses to make smart investments that benefit society and their companies, to incentivize even more investments in green infrastructure and clean energy. You mentioned how California’s ambitious renewable energy portfolio led to interest from these large investors. I wonder how we can replicate this in other states, like North Carolina, where utility monopolies and Republican legislators hinder the creation of such ambitious renewable goals.
I thought this post was particularly interesting as it provided significant amounts of detailed data to support its points on policy incentives for renewable energy development. Learning about the AWEC and using it as a case study to prove the importance of policies for the US green transition was a great idea, as it revealed the environmental, societal and economic benefits from its construction and operation. As you discussed the IRA and the benefits it provided for updating the AWEC, I wonder if this will continue with the shift in administrations. I also am intrigued to learn more about how policies may not always successfully encourage this green transition. Thinking about cap and trade permits and policy initiatives, while they can be successful, they can also disincentivize older firms from ever improving their high-polluting factories. Nonetheless, I completely agree that policy incentives are essential for increased renewable development. I think something else to consider is how to frame these policies and overall a shift to renewables as beneficial to more conservative states. After doing a few readings on which states will benefit the most from renewables, it is clear that it is often red states. However, given their affiliation to Trump and the ever-increasing extreme republican party, many citizens do not actually realize the economic and societal benefits aside from just environmental benefits renewables pose. I wonder how policies and political action can be framed differently to inform citizens and even some politicians about these unrealized benefits? Do you think this is possible in such a divided society?